2017 (3) TMI 647

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....ri Jai Kumar Lohani. It is alleged that the assessee-Respondent, during the period under consideration, was engaged in the manufacture of branded manufactured tobacco falling under Chapter Heading 24039990 and Roasted Cut Supari falling under Chapter Heading 21069030 of the First Schedule to the Central Excise Tariff Act, 1985. The Officers of the Department had visited the factory of the assessee-Respondent on 23.02.2011 for search of the factory premises. At the time of search, no other person was found except Shri Rajendra Singh Rajput, Accountant, in the factory. It was noticed that the factory was not in operation and there was no production activity. No electric supply in the factory was also found. Physical verification of the fin....

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....Shiv Udhyog are cleared through the Vehicle No. MP09 1422, MP09 1421 and MP09 1240 but he did not remember the series of the vehicles." The show cause notice was issued on 19.08.2011 proposing confiscation of the seized goods and demanded duty being the branded items. The Commissioner vide the impugned order has set aside the proposed demand. Being aggrieved, the Department has filed the present appeal. 3. With this background, we have heard Shri Yogesh Agarwal, learned DR for the Department and Shri C. Harishankar along with Shri S. Sunil, learned Counsels for the assessee-Respondent. 4. After hearing both sides and on perusal of record, it appears that from "betel nut" to "suprai", there must be some preparation in which betel nu....

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....sified under Tariff Item No. 08029012 of the CETA attracting NIL rate of duty. Further, the confiscation of the unbranded chewing tobacco is not sustainable in law for the reason that the tobacco under seizure is not branded, especially when the assessee-Respondent is entitled for SSI exemption upto Rs. 1.5 crore under Notification No. 08/2003-CE dated 01.03.2003. Therefore, neither the goods under seizure can be confiscated nor any penalty can be imposed under Rule 25 of the Central Excise Rules. 6. From the record, it appears that the marks found on the bags of the seized manufactured tobacco are actually indicating the mix of tobacco meant for use by the manufacturer for a specific brand. They show that tobacco has been mixed in accor....